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| Oil Down Big! Posted by greenhead11 Oil is seemingly in a free fall. Don't know what combination of factors is causing this, but the oil services and providers are getting hammered as is my portfolio.  on 5/8 at 10:00 amDemand destruction? Removal of the geopolitical risk premium? Increased suppl? Whatever it is I'm now a bit more worried than I was last week about the the US and world economy (not just due to oil) Reply • Back to Top |
quote: The price of oil is a strange animal. On one hand it is a predictor of future economic growth. On the other hand, it is a headwind to future economic growth. Reply • Back to Top |
Lots of reasons and this may be one. quote: Bloomberg Reply • Back to Top |
quote: Exactly! Its like a catch 22. I'm in a quandry trying reconcile both sides and anticipate the future. Where oil goes without geopolitical esclation- I honestly have no idea. I still give some geopolitical turmoil a speculative 50% chance of reoccuring- especially post election time Reply • Back to Top |
Posted by Tigris on 5/8 at 12:15 pm to greenhead11 All commodities are getting hammered. Gold, silver, copper, molybdenum, fertilizers, natural gas... You are not alone in being more concerned about the world economy. Reply • Back to Top |
| We also have an election coming up Reply • Back to Top |
| You serious clark? Reply • Back to Top |
quote: People put WAY too much stock into this, imo Reply • Back to Top |
| Dad was telling me about a bill being signed for a pipeline in canada running through ND to the refineries in Texas. He said he thought oil would shoot down. Reply • Back to Top |
| TransCanada filed their new permit for Keystone, I don't think anyone has any idea when that might actually be approved much less be built, and its not like that's news to anyone given the political wrangling over the issue for the last year or so. Kinder is building one in Canada but its not coming south, ONEOK announced they were building an NGL pipe to connect from the Bakken to an existing pipe they already have. I can't think of any news announcing any international pipes which would require a bill, those tend to draw a lot of non-industry observers given the political posturing that follows anything...political. Reply • Back to Top |
| You seem to be pretty knowledgeable about O&G domestically, What do you think about MLPs going forward? I'm specifically looking at EPD and already have some of my parents' $ in KMP and it has paid off well. Interest rate risk? Reply • Back to Top |
| Oil is not down that big. Reply • Back to Top |
| Keystone is already connected to the Cushing hub. Obama was here to announce the approval of the Cushing to the Gulf portion to the processing plants, Champion is drilling the piss out of the Dakotas and Rockies there's a bottleneck to the refineries. Reply • Back to Top |
| 10% in one week is pretty significant to me! Reply • Back to Top |
quote: What? Reply • Back to Top |
quote: Ignoring valuation and personal preferences for dividend vs price appreciation, I think companies that are gas-focused (but NGL focused) might be oversold based on misperception. Although processing operations open them up to more commodity price exposure, the frac spread is looking nice these days. So I'd check into gas heavy, NGL focused pipes with large processing operations. EPD is probably the poster boy for such a description. Reply • Back to Top |
quote: Something I need to learn more about, but what are the better metrics to value MLP's? I would think on P/FCF, TEV/EBITDA, and distribution growth rate would be most instructive for comps? quote: I would tend to argue that MLPs are a nice balance of these two objectives. I would be going into MLPs for income and indirect commodity exposure for the old folks portfolio (which is heavily income oriented). As for me personally gotta have a healthy mix of both- along with some good old non dividend paying growth Reply • Back to Top |
quote: Price to distributable cash flow, distribution coverage ratios, distribution growth rate, really inspect the waterfall structure. The asset side of things IMO is tough just because of their inherent financial structure. quote: I agree, I was just caveating that as one MLP might be better for pure distribution growth while another might be less mature and have a lot more of a price appreciation expectation to it, and that that's (as I'm sure you know, just saying) a portfolio-based decision rather than a company-specific one. Reply • Back to Top |
| I trade oil everyday, in fact, I'm trading it now as I type. I can tell you that Crude prices should never have been over 102 to begin with. Everytime the price rises above $100/bbl we have an economic slowdown in our country. Our economy cannot support $100/bbl Oil. This entire run-up in prices to $110 was the result of aggresive talk coming out of Iran by their gov't threatening to close the Strait of Hormuz. On the day that prices peaked above $110 it was on news by an Iranian news station that there was an attack on a Saudi pipeline. The news was poven false 20 mins later. I can tell you that there were abnormally large amounts of futures contracts being sold above $110. Since that day there has not been a single aggressive word come out of Iran and prices have fallen. It's my opinion that the Iranian gov't ran-up prices on rhetoric and hedged out at the highs since they need oil above $100 to support there fiscal situation. Reply • Back to Top • Refresh |
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